That means it enters into "streaming" agreements with mining companies to purchase a set volume of the miner's production at a specific price. Wheaton Precious Metals is precious metals streaming company. That would cement its place as the undisputed leader of the global cobalt market. If it hits the mark, and selling prices average a conservative $40,000 MT in a few years, then cobalt production would generate $2.7 billion in annual revenue. It expects to ramp cobalt production to 68,000 MT by 2021, representing 74% growth from 2018 levels. Growing pains aside, Glencore thinks it can address the uranium impurity by adding an additional processing unit at Katanga and believes it can work out its contract issue. Separately, a Chinese battery customer has stopped purchasing cobalt from the miner after market prices dropped below those outlined in the three-year supply agreement. That's not as unusual as it sounds, as many metals are found together (gold and silver, gold and lead, copper and cobalt, nickel and cobalt, and the like), but it's an unacceptable impurity for battery customers. More worrisome, Glencore had to halt cobalt exports after finding uranium in the finished cobalt hydroxide product produced from a part of the Katanga facility. That included a sharp reduction of 8,000 MT due to delays ramping production at its expanded facility in Katanga that produces both copper and cobalt. The company's most recent guidance called for hitting the mark of 39,000 MT of cobalt output in 2018, but a revised estimate of just 57,000 MT in 2019.
As a $53 billion company, it has the financial heft required to operate in the cobalt-rich, high-risk region of Katanga, Democratic Republic of Congo. Glencore is the world's largest miner of cobalt, responsible for some 25% of the planet's total output in 2017 - and that was before it embarked on expansion plans that would triple production in the three-year period ending 2019. Nonetheless, my picks for the top two cobalt stocks to look at for 2019 are mining giant Glencore (NASDAQOTH: GLCNF) and precious metals streamer Wheaton Precious Metals (NYSE: WPM).
Given the concentrated production profile, there aren't many great investment opportunities for individual investors.
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